Last year, Amazon Prime Day(s) generated an eye-popping $7.16 billion in sales for Amazon over the two-day shopping bonanza, July 15-16. Retail experts predict that this year’s event, happening Oct. 13-14, will bring Amazon around $10 billion in sales.
That should buoy non-Amazon retailers as well, many of which now offer their own competing deals during Prime Day. During last year’s Prime Days, online sales for non-Amazon websites grew 76% in the U.S.
But that boost may come with a cost for all retail: Black Friday and Cyber Monday, historically the blowout days of the holiday shopping season, might be more muted this year.
That’s due to Amazon moving Prime Day to the fall, which encroaches on the holiday season, but also to the COVID-19 pandemic, which has caused a massive surge in e-commerce and a pull-forward in demand.
Brick-and-mortar retailers like Walmart, Target, Best Buy, and Dick’s Sporting Goods have all reported huge online sales growth in Q2, along with online-only retailers like Wayfair and Etsy. With so many Americans making so many purchases online for the past seven months, they might feel more shopped-out come November than usual.
“We are predicting that 10% of Cyber Week traffic and sales are being pulled into October,” says Rob Garf, VP of retail strategy and insights for Salesforce. “Black Friday and Cyber Monday doesn’t go away, but it certainly levels off in terms of relevancy, because of that pulling forward of demand.”
And that’s just fine with retailers, believe it or not.
“Retailers want that,” Garf says. “They don’t want the same volume of traffic and people lining up at stores on Black Friday to get those doorbusters. They’d rather see a leveling off of that demand. They have been trying to pull demand earlier and earlier into the fall for as long as I can remember, but there’s never been a compelling event.”
Amazon, this year, created the event—but the larger event that no one could have foreseen was the pandemic.
The pandemic created three major effects that will take a toll on holiday shopping: product scarcity (think of people waiting for months for their Peloton bike to arrive); health and safety concerns (consumers aren’t going to stores in person at nearly the same levels as in the past, even though many stores have reopened; instead they’re choosing delivery or curbside pickup); and potential shipping problems.
“We’re predicting that the traditional carriers are going to be 5% over capacity,” Garf says. “That means 700 million packages worldwide are at risk of not getting to the doorstep in time for the holidays. Consumers realize that—they saw that in the spring—and they’re going to buy earlier.”
What does it all amount to? Less focus on hyping up Black Friday day-of deals; offering holiday deals even earlier; and the growth of e-commerce accelerating dramatically.
As of August 2019, e-commerce made up 10.8% of all U.S. retail, according to the Department of Commerce. By August 2020, it was up to 16.1%. Garf predicts that online sales will comprise 30% of all sales this holiday season. “It took us 20 years as an industry to get to 15%,” he says. “Now we are surging up to 30%.”
For years, some predicted (or hoped for) the end of Black Friday as a one-day, all-important shopping bonanza. The pandemic, along with Amazon Prime Day in October, might really make it happen.
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Daniel Roberts is an editor-at-large at Yahoo Finance. Follow him on Twitter at @readDanwrite.
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